THIS REPORT HAS BEEN FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION VIA EDGAR
------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1998
Commission File No. 1-11121
T F C E N T E R P R I S E S, I N C.
(Exact name of registrant as specified in its charter)
Delaware 54-1306895
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5425 Robin Hood Road
Suite 101B
Norfolk, Virginia 23513
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code -- (757) 858-1400
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value per share
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No
As of May 5, 1998, there were 11,290,308 outstanding shares of the registrant's
$.01 par value per share common stock.
<PAGE>
TFC ENTERPRISES, INC.
QUARTERLY REPORT ON FORM 10-Q FOR
THE THREE MONTHS ENDED MARCH 31, 1998
Table of Contents and 10-Q Cross Reference Index
Part I - Financial Information Page No.
- ------------------------------ --------
Financial Highlights 3
Financial Statements (Item 1)
Consolidated Balance Sheets 4
Consolidated Statements of Income 5
Consolidated Statements of Changes in Shareholders' Equity 6
Consolidated Statements of Cash Flows 7
Notes to Consolidated Financial Statements 8
Management's Discussion and Analysis of Financial Condition
and Results of Operations (Item 2) 11
Part II - Other Information
Exhibits and Reports on Form 8-K (Item 6) 17
Signatures 18
Index to Exhibits 19
2
<PAGE>
TFC ENTERPRISES, INC.
FINANCIAL HIGHLIGHTS
(Unaudited)
<TABLE>
<CAPTION>
Three months
(dollars in thousands, except ended March 31,
per share amounts) 1998 1997
- ----------------------------- ---------- -----------
<S> <C>
Net income $ 341 $ 196
Net income per basic/diluted common share $ .03 $ .02
Average common and common equivalent
shares outstanding (in thousands) 11,290 11,290
Performance ratios (annualized, as appropriate):
Return on average common equity 4.37% 2.62%
Return on average assets 0.90 0.51
Yield on interest-earning assets 21.64 21.05
Cost of interest-bearing liabilities 10.91 10.28
Net interest margin 13.82 13.35
Operating expense as a percentage of
average interest-earning assets 13.48 12.60
Total net charge-offs to average
gross contract receivables,
net of unearned interest 21.43 21.15
60+ days delinquencies to period-end
gross contract receivables 7.35 9.01
Total allowance and nonrefundable reserve
to period end gross contract receivables,
net of unearned interest 13.70 16.60
Equity to assets, period end 20.37 19.76
Average balances:
Interest-earning assets (a) $157,459 $157,236
Total assets 151,244 155,144
Interest-bearing liabilities 112,972 117,777
Equity 31,252 29,944
</TABLE>
Note: Throughout this report, ratios are based on unrounded numbers and factors
contributing to changes between periods are noted in descending order of
materiality.
(a) Average interest-bearing deposits and gross contract receivables net of
unearned interest revenue and unearned discount.
3
<PAGE>
TFC ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
(dollars in thousands) 1998 1997
--------- ---------
Assets
Cash and cash equivalents $ 2,166 $ 1,975
Net contract receivables 136,227 128,503
Recoverable income taxes 162 1,229
Property and equipment, net 2,122 2,297
Intangible assets, net 11,797 12,070
Deferred income taxes 188 188
Other assets 1,558 1,571
-------- -------
Total assets $154,220 $147,833
======== ========
Liabilities and shareholders' equity
Liabilities:
Revolving lines of credit $104,196 $ 98,572
Subordinated notes 11,226 11,214
Accounts payable and accrued expenses 3,481 2,841
Income taxes 2,075 2,075
Refundable dealer reserve 1,752 1,987
Other liabilities 69 64
---------- ---------
Total liabilities 122,799 116,753
Shareholders' equity:
Preferred stock, $.01 par value, 1,000,000 shares
authorized; none outstanding -- --
Common stock, $.01 par value, 40,000,000 shares
authorized; 11,290,308 outstanding 49 49
Additional paid-in capital 55,844 55,844
Retained deficit (24,472) (24,813)
-------- ---------
Total shareholders' equity 31,421 31,080
-------- ---------
Total liabilities and shareholders' equity $154,220 $147,833
======= =========
See accompanying Notes to Consolidated Financial Statements.
4
<PAGE>
TFC ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
---------------------------------
March 31, March 31,
(in thousands, except per share amounts) 1998 1997
---- -----------
<S> <C>
Interest and other finance revenue $ 8,520 $ 8,275
Interest expense 3,080 3,027
------- -------
Net interest revenue 5,440 5,248
Provision for credit losses 121 92
--------- --------
Net interest revenue after
provision for credit losses 5,319 5,156
Other revenue:
Commissions on ancillary products 243 253
Other 85 23
--------- ---------
Total other revenue 328 276
Operating expense:
Salaries 2,682 2,443
Employee benefits 483 323
Occupancy 222 236
Equipment 305 294
Amortization of intangible assets 273 273
Other 1,341 1,384
-------- -------
Total operating expense 5,306 4,953
------- -------
Income before income taxes 341 479
Provision for income taxes -- 283
--------- --------
Net income $ 341 $ 196
======== =======
Net income per common share:
Basic $ .03 $ .02
========= =========
Diluted $ .03 $ .02
========= =========
See accompanying Notes to Consolidated Financial Statements.
5
<PAGE>
TFC ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
</TABLE>
<TABLE>
<CAPTION>
Three months ended
March 31,
-----------------------
(in thousands) 1998 1997
---- ----
<S> <C>
Common stock
Balance at beginning and end of period $ 49 $ 49
====== ======
Additional paid-in capital
Balance at beginning and end of period $ 55,844 $ 55,333
====== ======
Retained deficit
Balance at beginning of period $(24,813) $(25,520)
Net income (a) 341 196
--------- ---------
Balance at end of period $(24,472) $(25,324)
========= =========
</TABLE>
(a) There are no adjustments to net income to determine comprehensive income for
the periods presented.
See accompanying Notes to Consolidated Financial Statements.
6
<PAGE>
TFC ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
----------------------
(in thousands) 1998 1997
---- ----
<S> <C>
Operating activities
Net income $ 341 $ 196
Adjustments to reconcile net income to
net cash provided by operating activities:
Amortization of intangible assets 273 273
Depreciation and other amortization 319 406
Provision for credit losses 121 92
Changes in operating assets and liabilities:
Decrease in recoverable income taxes 1,067 2
Decrease (increase) in other assets 38 (172)
Increase (decrease) in accounts payable and accrued expenses 640 (817)
Increase in income taxes -- 283
Decrease in refundable dealer reserve (235) (295)
Increase in other liabilities 5 104
------ ------
Net cash provided by operating activities 2,569 72
Investing activities
Net cost of acquiring contract receivables (29,575) (21,954)
Repayment on contract receivables 21,730 27,052
Purchase of property and equipment ( 31) (147)
----- -----
Net cash provided by (used in) investing activities (7,876) 4,951
Financing activities
Net borrowings on revolving lines of credit 5,498 3,682
Payments on Term notes - (4,489)
Payments on Automobile Receivables-Backed notes - (5,204)
Decrease in restricted cash - 939
------ ----
Net cash provided by (used in) financing activities 5,498 (5,072)
------ ------
(Decrease) increase in cash and cash equivalents 191 (49)
Cash and cash equivalents at beginning of period 1,975 2,688
------ ------
Cash and cash equivalents at end of period $ 2,166 $ 2,639
====== ======
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
7
<PAGE>
TFC ENTERPRISES, INC.
Notes to Consolidated Financial Statements
1. Summary of significant accounting policies
Organization and business. TFC Enterprises, Inc. ("TFCE") is a holding company
that owns two primary subsidiaries, The Finance Company ("TFC") and First
Community Finance, Inc. ("FCF"). TFCE has no significant operations of its own.
TFC specializes in purchasing and servicing installment sales contracts
originated by automobile and motorcycle dealers in the sale of used automobiles,
vans, light trucks, and new and used motorcycles (collectively "vehicles") both
on an individual basis ("point of sale" purchase) and on a portfolio basis
("portfolio" purchase). Based in Norfolk, Virginia, TFC also has offices in
Killeen, Texas; Jacksonville, Florida; and San Diego, California. FCF is
involved in the direct origination and servicing of small consumer loans. FCF
operates branch offices in Virginia and North Carolina.
Basis of presentation. The unaudited consolidated financial statements of the
Company are prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. These financial statements should be read in
conjunction with the Company's 1997 Annual Report on Form 10-K. In the opinion
of management, all normal recurring adjustments which management of the Company
considers necessary for a fair presentation of the financial position and
results of operations for the periods are reflected in the financial statements.
Operating results for the three months ended March 31, 1998, are not necessarily
indicative of the results that may be expected for the entire year ending
December 31, 1998.
New Accounting Standards. As of January 1, 1998,TFCE adopted Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income".
Statement No. 130 establishes new rules for the reporting and presentation of
comprehensive income and its components, however, the adoption of this statement
had no impact on TFCE's net income or shareholders' equity.
8
<PAGE>
TFC ENTERPRISES, INC.
Notes to Consolidated Financial Statements (continued)
2. Contract receivables
The following is a summary of contract receivables at March 31, 1998, and
December 31, 1997:
March 31, Dec. 31,
(in thousands) 1998 1997
------------- -------
Contract receivables:
Auto finance $179,939 $171,356
Consumer finance 13,223 12,886
------- -------
Gross contract receivables 193,162 184,242
Less:
Unearned interest revenue 31,092 27,549
Unearned discount 1,754 729
Unearned commissions 711 672
Unearned service fees 806 629
Payments in process 4 2,617
Escrow for pending acquisitions 372 514
Allowance for credit losses 691 684
Nonrefundable reserve 21,505 22,345
------- -------
Net contract receivables $136,227 $128,503
======= =======
Changes in the allowance for credit losses and nonrefundable reserve for the
three months ended March 31, 1998 and 1997 were as follows:
Three months ended
March 31,
-----------------------
(in thousands) 1998 1997
---- ----
Balance at beginning of period $23,029 $28,575
Provision for credit losses 121 92
Allocation for credit losses 7,534 3,990
Charge-offs (9,703) (9,311)
Recoveries 1,215 1,215
------ -------
Balance at end of period $22,196 $24,561
====== ======
9
<PAGE>
TFC ENTERPRISES, INC.
Notes to Consolidated Financial Statements (continued)
3. Computation of primary and fully diluted earnings per share
Basic and diluted earnings per share for the three months ended March 31, 1998
and 1997 were as follows:
Three months ended
March 31,
------------------------------
(in thousands, except per share amounts) 1998 1997
---- ----
Basic earnings per share:
Net income $ 341 $ 196
Stock and stock equivalents (average shares):
Common shares outstanding 11,290 11,290
------ ------
Total stock and stock equivalents 11,290 11,290
------ ------
Basic earnings per share (a) $ .03 $ .02
======== ========
Diluted earnings per share:
Net income $ 341 $ 196
Stock and stock equivalents (average shares):
Common shares outstanding 11,290 11,290
Effect of dilutive securities:
Warrants 378 --
Employee stock options 61 54
-- --
Dilutive potential common shares 439 54
--- --
Total stock and stock equivalents 11,729 11,344
------ ------
Diluted earnings per share (a) $ .03 $ .02
======== ========
(a) Calculation based on unrounded numbers.
10
<PAGE>
TFC ENTERPRISES, INC.
Management's Discussion And Analysis Of Financial Condition
And Results Of Operations
Cautionary statement under the "Safe-Harbor" provisions of the Private
Securities Litigation Reform Act of 1995: Included in this Report and other
written and oral information presented by management from time to time,
including but not limited to, reports to shareholders, quarterly shareholder
letters, filings with the Securities and Exchange Commission, news releases and
investor presentations, are forward-looking statements about business
strategies, market potential, potential for future point-of-sale and portfolio
purchases, future financial performance and other matters that reflect
management's expectations as of the date made. Without limiting the foregoing,
the word "believes," "anticipates," "plans," "expects,""seeks," "estimates," and
similar expressions are intended to identify forward-looking statements. Future
events and the Company's actual results could differ materially from the results
reflected in these forward-looking statements. There are a number of important
factors that could cause the Company's actual results to differ materially from
those indicated by such forward-looking statements. These factors include,
without limitation: the Company's dependence on its line of credit, the
fluctuating interest rates associated with its line of credit and the impact of
installment contract defaults. Please refer to a discussion of these and other
factors in this Report and the Company's other Securities and Exchange
Commission filings. The Company disclaims any intent or obligation to update
these forward-looking statements, whether as a result of new information, future
events or otherwise.
Results of Operations
Net income and earnings per common share
First quarter 1998 net income was $0.3 million, or $0.03 per common share,
compared to net income of $0.2 million, or $0.02 per common share, in the first
quarter of 1997.
Volume
Gross contracts purchased or originated totaled $51.3 million in the first
quarter of 1998, or 49% above the $34.3 million purchased in the first quarter
of 1997. The increase was attributable primarily to a $22.2 million increase in
point-of-sale purchases, resulting from increased management emphasis on this
line of business. Although management has not decreased emphasis on the
portfolio business line, the Company is facing increased competition in this
business line which impacts the pricing and economics of portfolio purchases.
11
<PAGE>
TFC ENTERPRISES, INC.
Gross contracts purchased or originated were as follows for the three months
ended March 31, 1998 and 1997:
<TABLE>
<CAPTION>
Three months ended
March 31,
1998 1997
---------------------------- ------------------------------------
(dollars in thousands) Amount Percent Amount Percent
<S> <C>
Contracts purchased or originated:
Auto finance:
Point-of-sale $37,876 73.8% $15,675 45.6%
Portfolio 10,225 19.9 16,405 47.8
Consumer finance 3,220 6.3 2,267 6.6
----- ---- ----- ----
Total $51,321 100.0% $34,347 100.0%
====== ===== ====== =====
Number of contracts purchased or
originated:
Auto finance:
Point-of-sale 3,079 45.5% 1,410 24.4%
Portfolio 1,923 28.4 3,272 56.6
Consumer finance 1,763 26.1 1,103 19.0
----- ---- ----- ----
Total 6,765 100.0% 5,785 100.0%
===== ===== ===== =====
</TABLE>
Net interest revenue
Net interest revenue for the first quarter of 1998 totaled $5.4 million, an
increase of 4%, from $5.2 million in the prior year period. The increase was
attributable to slightly higher average interest- earning assets, offset, in
part, by a slight decrease in the net interest spread.
The yield on interest-earning assets was 21.6% in the first quarter of 1998,
compared to 21.1% in the first quarter of 1997. The increase was attributable to
a $0.2 million increase in the amount of contract purchase discount accreted to
interest revenue as a yield enhancement in addition to a decrease in restricted
cash.
The cost of interest-bearing liabilities was 10.9% in the first quarter of 1998,
compared with 10.3% in the first quarter of 1997. The increase was primarily
attributable to the amortization of stock warrants issued in 1997.
12
<PAGE>
TFC ENTERPRISES, INC.
Net interest revenue, net interest spread, and net interest margin were as
follows for the three months ended March 31, 1998 and 1997:
Three months ended
March 31,
(dollars in thousands) 1998 1997
------ -----
Average interest earning assets (a) $157,459 $157,236
Average interest bearing liabilities 112,972 117,777
------- -------
Net interest earning assets $ 44,487 $ 39,459
====== ======
Interest and other finance revenue $ 8,520 $ 8,275
Interest expense 3,080 3,027
------ ------
Net interest revenue $ 5,440 $ 5,248
===== =====
Yield on interest-earning assets 21.64% 21.05%
Cost of interest-bearing liabilities 10.91 10.28
----- -----
Net interest spread 10.73% 10.77%
===== =====
Net interest margin (b) 13.82% 13.35%
===== =====
(a) Average interest-bearing deposits and gross contract receivables net of
unearned interest revenue and unearned discount.
(b) Net interest margin is annualized net interest revenue divided by average
interest-earning assets.
Operating expense
The increase in operating expenses as compared to the first quarter of 1997
resulted in a decrease in income before taxes in the first quarter of 1998 as
compared to the first quarter of 1997. Operating expense was $5.3 million in the
first quarter of 1998, compared with $5.0 million in the first quarter of 1997.
The increase in operating expenses of $0.3 million, or 7%, in the first quarter
of 1998 compared to the first quarter of 1997 primarily reflects increased
salary and benefit expenses related to the additional marketing and collection
personnel added in the last six months of 1997 and the first quarter of 1998 as
well as the operating expenses associated with the additional five First
Community Finance branches opened since the first quarter of 1997.
Provision for income taxes
The Company recorded no income provision in the first quarter of 1998. The
Company anticipates the reversal of a portion of the deferred tax valuation
allowance recorded at year end 1997 will offset the tax expense related to the
estimated income for fiscal year 1998.
13
<PAGE>
TFC ENTERPRISES, INC.
Other matters
Until recently computer programs were written to store only two digits of
date-related information in order to more efficiently handle and store data.
Thus the programs were unable to properly distinguish between the year 1900 and
the year 2000. Utilizing both internal and external resources, the Company is in
the process of defining, assessing and converting, or replacing, various
programs and hardware systems to make them Year 2000 compatible. The Company's
Year 2000 project is comprised of business applications which consist of the
Company's computer systems, as well as the computer systems purchased from
third-party suppliers. It is estimated that the cost of addressing the year 2000
problem and making the Company's computer systems year 2000 compliant will not
be material.
Financial Condition
Assets
Total assets increased by $6.4 million, or 4%, to $154.2 million at March 31,
1998, from $147.8 million at December 31, 1997. The increase was primarily
attributable to an increase in net contract receivables.
Net contract receivables were as follows at March 31, 1998 and December 31,
1997:
March 31, Dec.31,
(in thousands) 1997 1997
----- -----
Auto finance:
Point-of-sale $ 86,942 $ 75,197
Portfolio 37,223 41,612
Consumer finance 12,062 11,694
-------- ----------
Total $136,227 $128,503
======== ========
Liabilities
Total liabilities were $122.8 million at March 31, 1998, an increase of $6.0
million, or 5%, from $116.8 million at December 31, 1997. The increase in
liabilities compared with year-end 1997 primarily reflected increased borrowings
under the Company's credit facilities which, in turn, resulted in a increase in
net contract receivables.
Credit Quality and Reserves
Auto finance contract receivables-Net charge-offs
Net charge-offs to the allowance for credit losses and nonrefundable reserve
were $8.4 million in the first quarter of 1998, representing an annualized rate
of 23.3% of average gross contract receivables net of unearned interest revenue.
This compares to $8.0 million, or 22.0% in the first quarter of 1997. The
increase in net charge-offs in the first quarter of 1998, relative to the
comparable period in 1997 was due to the increase in charge-off of portfolio
contracts.
14
<PAGE>
TFC ENTERPRISES, INC.
Auto finance contract receivables-Provision for credit losses
The Company's primary business involves purchasing installment sales contracts
at a discount to the remaining principal balance. A portion of the discount is
generally held in a nonrefundable dealer reserve against which credit losses are
first applied. Additional provisions for credit losses, if necessary, are
charged to income in amounts considered by management to be adequate to absorb
future credit losses. Improved credit quality and servicing of the Company's
auto finance contracts eliminated the need for a loss provision for all of 1997
and the first quarter of 1998. Provision for credit losses is dependent on a
number of factors, including, but not limited to, the level and trend of
delinquencies and net charge-offs, the amount of nonrefundable and refundable
dealer reserves and the overall economic conditions in the markets in which the
Company operates. Due to the inherent uncertainty involved in predicting the
future performance of these factors, there can be no assurance regarding the
future level of provision for credit losses.
Auto finance contract receivables-Reserves
At March 31, 1998, the combination of the Company's allowance for credit losses
and nonrefundable dealer reserve totaled $21.5 million, or 14.4%, of contract
receivables net of unearned interest revenue. This compares to $22.3 million, or
15.5%, at December 31, 1997. In addition, the Company's refundable dealer
reserve, which is available to absorb losses relating to contracts purchased
from certain dealers, totaled $1.8 million at March 31, 1998, compared to $2.0
million at December 31, 1997. The decrease in reserves and in the percentage of
reserves to contract receivables in 1998, compared to 1997, is the result of the
improved credit quality of the contracts.
Consumer finance charge-offs, provision for credit losses and reserves
Net charge-offs to the allowance for credit losses were $0.1 million in the
first quarter of 1998 and first quarter of 1997, representing an annualized rate
of 3.5% and 3.4% of average gross contract receivables net of unearned interest
revenue, respectively. The provision for credit losses was $0.1 million for the
first quarter of 1998 compared to $0.09 million for the first quarter of 1997
and the allowance for credit losses was $0.7 million or 5.3% of outstanding
gross contract receivables at March 31, 1998 and December 31, 1997. Management
has established the level of allowance that is considers to be adequate based on
FCF's experience through March 31, 1998.
Charge-offs net of recoveries, by line of business, for the three months ended
March 31, 1998 and 1997, were as follows:
Three months ended
March 31,
-----------------------
(in thousands) 1998 1997
---- ----
Auto finance:
Point-of-sale $ 4,383 $ 5,179
Portfolio 3,992 2,837
Consumer finance 113 80
------ --------
Total $ 8,488 $ 8,096
====== =======
15
<PAGE>
TFC ENTERPRISES, INC.
Delinquencies
Gross auto finance contract receivables that were 60 days or more past due
totaled $13.8 million, or 7.7% of gross auto finance contract receivables at
March 31, 1998, compared to $15.9 million, or 9.3%, at December 31, 1997. This
improvement in delinquency was the result of improved underwriting and increased
collection efforts.
Gross consumer finance receivables that were 60 days or more past due totaled
$0.4 million, or 3.2% of gross receivables at March 31, 1998, compared to $0.4
million, or 3.1% at December 31, 1997.
Delinquency at March 31, 1998 and December 31, 1997 was as follows:
<TABLE>
<CAPTION>
March 31, Dec. 31,
(dollars in thousands) 1998 1997
---- ----
<S> <C>
Gross contract receivables 60 days and more delinquent $ 14,202 $ 16,310
Gross contract receivables 193,162 184,242
Percent 7.35% 8.85%
</TABLE>
Liquidity and Capital Resources
Liquidity management. As shown in the Consolidated Statements of Cash Flows,
cash and cash equivalents increased in the first quarter of 1998 to $2.2
million. The increase reflected $2.6 million of net cash provided by operating
activities and $5.5 million of net cash provided by financing activities
partially offset by $7.9 million of net cash used in investing activities. Net
cash used in investing activities resulted from net cost of acquiring contract
receivables exceeding the repayment of contract receivables resulting in an
overall increase in net contract receivables. Net cash provided by financing
activities reflected net borrowings on the revolving lines of credit used to
fund the increase in net contract receivables. For the first three months of
1997, net cash used in financing activities totaled $5.1 million, primarily
reflected $5.2 million repayment on borrowings on automobile receivables-backed
notes, $4.5 million repayment on term notes, offset in part by $3.7 million in
net borrowings under the Company's revolving lines of credit. In the first
quarter of 1998, the combination of cash on hand and net cash provided by
financing activities was sufficient to fund business volume. In the first
quarter of 1997, the combination of cash on hand and net cash provided by
investing activities was sufficient to fund the growth in business volume.
16
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule, which is submitted
electronically to the Securities and Exchange
Commission for information only and not filed.
(b) Reports on Form 8-K
On March 3, 1998, the Company filed a report on Form 8-K,
under Item 5, regarding the execution of Amendment No. 2 to
its Amended and Restated Motor Vehicle Installment Contract
Loan and Security Agreement with its principal lender.
17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TFC ENTERPRISES, INC.
(Registrant)
Date: May 5, 1998 By: /s/ Robert S. Raley Jr.
------------------------
Robert S. Raley, Jr.
Chairman, President,
Chief Executive Officer and
Director
Date: May 5, 1998 By: /s/ Craig D. Poppen
--------------------
Craig D. Poppen
Vice President, Treasurer
and Chief Financial Officer
(Principal Financial Officer
of the registrant)
18
<PAGE>
Index to Exhibits
Exhibit No. Description
27.1 Financial Data Schedule, which is submitted
electronically to the Securities and
Exchange Commission for information only and
not filed.
19
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TFC
ENTERPRISES INC. QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED
MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 2,166
<SECURITIES> 0
<RECEIVABLES> 158,423
<ALLOWANCES> 22,196
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 5,920
<DEPRECIATION> 3,798
<TOTAL-ASSETS> 154,220
<CURRENT-LIABILITIES> 122,799
<BONDS> 0
0
0
<COMMON> 49
<OTHER-SE> 31,372
<TOTAL-LIABILITY-AND-EQUITY> 154,220
<SALES> 8,520
<TOTAL-REVENUES> 8,848
<CGS> 0
<TOTAL-COSTS> 5,306
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 121
<INTEREST-EXPENSE> 3,080
<INCOME-PRETAX> 341
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 341
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
